PART 4
Outlook: expected trends in supply and demand

OVERVIEW1

SHORT-TERM OUTLOOK

The slowdown in the growth of fish supplies that started in 1997-1998
is likely to continue for a few years. The main reasons for this are the stable or
decreased landings from marine capture fisheries and a slower rate of growth in
aquaculture production than that recorded for the early 1990s. The negative impact of El
Niño on capture fish production was already evident in 1997. In 1998, landings are likely
to have declined even further, and production is expected to take some time to recover.
Supplies - particularly those from aquaculture - will be affected by a drop in demand over
the next two to four years, particularly in Japan and in other Asian economies. The
production of high-value aquaculture products will stagnate, as will international trade
in those products.

MEDIUM-TERM OUTLOOK

The State of World Fisheries and Agriculture 1996 predicted
increasing real prices for fish2 over the next 15 years. This projection was
based on exploratory calculations of supply and demand for fish in the year 2010, using
data from 1992.

A review of these projections in 1998 shows that the pressure for
increased real prices for fish in the coming decade is decreasing. It seems clear that
demand will not grow as rapidly as foreseen in mid-1995, while supply has been increasing
more rapidly than expected and, after a few years of relative stagnation, may resume
growth in the early years of 2000-2010. The slowdown in demand is due to a slower
population growth rate than that predicted, projections of slower economic growth and,
possibly, the increased competitiveness of poultry and pork.

Supply projections for fish have improved mainly on the strength of the
continued and rapid expansion of aquaculture production but also because improved capture
fisheries management means there is less likely to be a decline in capture fisheries
production.

GLOBAL FOOD SUPPLIES AND FISH

The growth rate of world agricultural production is slowing down.
From an anuual rate of about 3 percent in the 1960s, it dropped to about 1.6 percent
during the decade 1986-1995 (mainly because of the drastic production decline in countries
formerly comprising the USSR) and is expected to be in the order of 1.8 percent for the
period 1990-2010. Furthermore, since the 1950s, the average real price of agricultural
products has declined globally.

A different situation is true for the fisheries sector, as both
production and real prices have increased over the past three decades. Production
increased at a compound rate of 3.4 percent per year in the period 1960-1990, and this
growth rate has been maintained over the past decade. During the last 15 years, this
growth has essentially been a result of the rapid increase in aquaculture output, which
recorded an annual increase of 11.8 percent in the period 1984-1996. Although information
on prices is weak, indications are that prices have increased somewhat in real terms. This
has occurred in parallel with a slow increase in per caput supplies, supporting the idea
that fish generally falls into the category of preferred food items along with other
livestock products, in particular poultry and pork.

Thirty to 40 years ago, developing countries as a group were
significant net exporters of food. The situation has since changed and, by early next
century, developing countries as a group can be expected to become net importers of food.
For the poorest of these countries - most of which are found in sub-Saharan Africa and
South Asia - the financing of food imports will be a high priority, and capture fisheries
and aquaculture will come under strong pressure to provide exportable products.

DEMAND FOR FISH AND FISHERY PRODUCTS

The future demand for fish will basically be determined by the number
of consumers and their eating habits and disposable income as well as by prices of fish.

DISPOSABLE INCOME

The economic and financial crisis that has engulfed Asia and is also
being felt in other parts of the world has led to a downward revision of economic growth
projections for most Asian countries as well as for a growing number of countries
elsewhere. In fact, some of the larger Asian economies are expected to contract over the
next two to three years. An unavoidable consequence in the immediate future will be a
reduction in the demand for fish in Japan and in emerging Asian economies, and fish
exports to the latter will most probably decrease in volume. At the same time, the
fisheries sectors of developed Asian economies will face increasingly stiff competition
from developing economies whose currencies have undergone devaluations.

In Africa and Latin America, too, consumers will experience stagnation
and, in some cases, a decline in their disposable income. This will reduce demand for fish
and fishery products. However, the decline will be small in absolute terms, as consumption
is relatively modest at present. Consumption in North America is sensitive to economic
growth and, even with a degree of growth in disposable income, there may be room for some
expansion in the immediate future - at least in quantity terms. European demand will not
change much under the predicted slow economic growth scenario.

Projections of demand made by FAO in 1995 for the year 2010 assumed
that economic growth would have only a slight influence on the per caput consumption of
fish in Africa, Europe, Latin America and Oceania; in Africa because of slow - or zero -
per caput growth, and elsewhere because changes in income were not seen to have a major
influence on demand. For Asia and North America, the assumptions were different. The
average per caput consumption had been projected to grow considerably owing to expected
growth in disposable income. By late 1998, there was still no global consensus on when the
economic fortunes of Asia would improve. However, for the purpose of developing a supply
and demand scenario for the year 2010, it is assumed that growth will resume early in the
next decade.

DEMAND

In the first few years of the next century, the demand for fish in
Europe and North America is likely to shift downwards as competing livestock products -
particularly poultry and pork - become significantly cheaper. This is expected to come
about as a consequence of projected modifications to the European Community's (EC) Common
Agricultural Policy (CAP). The modifications are aimed, inter alia,at
reducing grain prices and subsequent livestock production costs. Given that poultry and,
in some areas, pork are preferred food products, it seems likely that consumers in Europe
and North America will eat less fish than they would have done in the absence of a
modified CAP. This shift in consumer demand will occur gradually after the year 2000.

NUMBERS OF CONSUMERS

In October 1996, the UN projected that the world's population in the
year 2010 would be about 140 million (i.e. 2 percent) less than it had predicted two years
earlier. This downward revision is the consequence of lower population growth rates,
particularly for Asia which accounts for a reduction of about 100 million in the revised
projections. In brief, the effect of a slower population growth in the short termwill be a decline in demand for high-priced aquatic products, although some of this
demand may be shifted to lower-priced fish products.

It also seems prudent to revise downwards the medium-termprojections
of world demand for food fish. Based on a scenario of modest reductions in the per caput
demand in Europe (down by 6 percent compared with 1995), North America (-4 percent) and
Asia (-8 percent), and incorporating the effect of a smaller population, the demand for
food fish in 2010 may be 105 million to 110 million tonnes (live weight equivalent),
whereas FAO's 1995 prediction was 110 million to 120 million tonnes.

SUPPLY OF FISH AND FISHERY PRODUCTS

AQUACULTURE

The supply of cultured finfish, crustaceans and molluscs has
continued to expand rapidly, and growth has been much faster than was envisaged only a few
years ago (Figure 43). Asia continues to dominate production, with its growing share in
total world output reaching 55 percent (in volume terms) in 1996, up from 51 percent in
1994. Within Asia, China is by far the largest producer; in volume terms, its finfish
production accounted for a major share of the world total. Almost all of China's
production is for domestic consumption, however. In terms of export revenue, the culture
of penaeid shrimps is the most important aquaculture activity in Asia, with shrimps
accounting for 26 percent of the value of the region's fish exports in 1996.3

Chinese aquaculture production started to increase rapidly in the
mid-1980s in response to very precise policy measures intended to stimulate production.
Households were given the authority to manage their own aquaculture activities, prices for
high-value aquaculture species were freed and the government supported farmers through
research and extension. It is generally believed that production will continue to
increase, although in some parts of the country it will change in nature as farmers
attempt to generate more value-added products from their plants - possibly by selecting
more expensive species. In the northern and inner parts of China, production will probably
increase mainly through the expansion of carp culture.

There are several reasons why Chinese aquaculture should be able to
withstand the present slowdown in the world economy. First, since consumption is
predominantly domestic, exports play a relatively small role and hence the sector is
little affected by world market forces.Furthermore,consumption patterns
observed during the recent period of economic growth indicate that fish (and livestock)
products are strongly preferred food items. Technologically, Chinese aquaculture
activities are self-reliant and use few imported inputs. Although the country has become a
major importer of fishmeal, a share of which is used in aquaculture, access to imported
fishmeal is not likely to be an obstacle for the bulk of Chinese aquaculture in the medium
term. It is most likely, therefore, that Chinese aquaculture production will continue to
grow in volume and that the culture of higher-priced marine products will also develop.

Carp

Culture provides more than 90 percent of the world's carp supplies
and carp account for about 14 percent of all finfish produced by both culture and capture
fisheries. China produces more than four-fifths of this amount. In China, as is the case
elsewhere, carp is consumed locally. With a few exceptions, producers of Chinese and major
Indian carps have been unable to find markets outside Asia. In fact, carps as a group are
not traded globally to the same extent as shrimps and salmon.

Carp culture in China, but also in India and countries of the CIS, will
probably continue to increase steadily - at least in the near future - in response to
population growth. In the long term, a substantial increase in the culture of Chinese and
major Indian carps will depend on the development of carp products for which there is a
demand in world markets.

Tilapia

Among the finfish produced in aquaculture, tilapias seem to be
assured a future owing to their specific production characteristics. First, there are
several different culture technologies available for these species, some of which permit
farmers to produce tilapia at a relatively low cost. Second, the flesh of tilapia is
generally white and can be used to produce white fish fillets, one of the basic products
in the international fish trade. Third, tilapia has spread outside Africa and is common in
Asia, Latin America and the Caribbean.

Tilapia has an established and rapidly expanding market in the United
States and is also being sold in Japan and in European countries. World cultured
production has risen steadily (at an average annual rate of 12 percent4) for
the past 12 years (Figure 44). The expansion of tilapia production can be expected to
continue for the following reasons:

tilapia can be produced by most developing countries with tropical or semi-tropical
climates, without reliance on imported inputs;

several developing country producers have become more competitive in the course of 1998
as their currencies have lost value relative to those of Japan, the United States and
European countries - a development that is not likely to be reversed in the coming decade;

tilapia has the most potential to replace marine fish in some white fish products;

as long as precautions are taken to preserve biological diversity where possible, there
need not be significant environmental externalities or costs associated with the culture
of tilapia;

tilapia species can be farmed in various aquatic environments using a number of
different technologies;

selective breeding is already showing positive results.

These arguments apply not only to the present major tilapia producers
in Asia but also to prospective producers in Africa, where production may expand rapidly
if conducive macroeconomic environments prevail. Furthermore, both developed and
developing economies will provide markets for tilapia and its products. In 1996, tilapia
accounted for about 5 percent of all cultured finfish; this share is very likely to
increase significantly over the next ten years.

Salmonids

The culture of salmon and trout is mostly carried out in Europe and
in the Americas. The volume of cultured salmons and trout is now catching up with landings
of these fish in capture fisheries, although the rate of expansion in farmed production is
slowing down. The industry is advanced, both technologically and commercially, and in many
countries is making systematic efforts to open new markets and stimulate further demand in
existing ones. Production costs are likely to be further reduced and the industry is also
likely to develop different products for new markets. Consequently, there is likely to be
a continued expansion of production.

Shrimps

Shrimps are an important source of income and hard currency in many
developing economies; they are less significant as a source of food. The total volume of
cultured penaeid shrimps is now close to half that produced by capture fishers. In volume
terms, the increase in production is tapering off in Asia and Latin America, while
production in Africa - although still small - is expanding fast.

There are, however, reasons to believe that growth in the immediate
future will slow down significantly and might even come to a halt. The main reason is the
short-term prospect of no economic growth occurring in Japan, the world's largest market
for shrimps, as well as the slow economic growth expected in the other developed
economies. In addition, management of shrimp culture is not at a uniformly high level.
Production from areas that have recovered from disease is invariably offset by losses
resulting from disease problems affecting other areas - a pattern that is not likely to
change for some time. Furthermore, the emergence of stringent environmental regulations
will slow down the expansion of shrimp culture, although production should recover and
output should start to expand significantly early in the period 2000-2010.

Molluscs

Mollusc culture is almost always destined for sale, and culture for
household needs is very rare. A large part of molluscs are sold to markets located near to
the place of production. However, some producers such as Canada, New Zealand and Spain
depend on international markets, and international trade in mollusc products is in fact
growing. Nevertheless, for mollusc culture - as is also true for carp culture - the
economic conditions within the producer country are an important factor. On the whole, it
seems that mollusc culture in Asia will not be affected much by the present economic
downturn and will continue as a source of growth in aquaculture production.

Conclusion

In the near future,the present economic crisis will
probably curb the rate of growth in aquaculture worldwide. This is in line with already
established trends - excluding those relating to China. Asian production will grow
moderately for products consumed in internal markets, which absorb the bulk of the output
volume. The projected stagnation - and even decline - of certain aquaculture products that
are traditionally exported to developed economies will effect the value of global
aquaculture production much more than its volume.

Judging from the situation at the end of 1998, aquaculture seems more
than likely to show sustained growthin the medium term. In the light of
previous studies5 and recent trends, it seems quite probable that total world
aquaculture production will have reached between 35 million and 40 million tonnes of
finfish, crustaceans and molluscs in the year 2010.

CAPTURE FISHERIES

Global capture fisheries production in 1996 was slightly greater
(+1.6 million tonnes) than in 1995. The preliminary estimates for 1997 are for a
contraction of about 0.9 million tonnes (Table 1), mainly owing to the decline in stocks
of small pelagic species off the west coast of South America (see Box 15, El Niño: the
consequences for fisheries). Between 3 and 5 percent of the reduction in global landings
by marine capture fishers can be attributed to the El Niño phenomenon.

BOX 15 El Niño: the consequences for fisheries

The El Niño phenomenon of 1997-1998 is considered to be the
second strongest "warm event" in the tropical and subtropical Pacific Ocean this
century. At the time of its maximum strength, it was not as strong as the 1982-1983 event,
but it lasted a little longer and had two peaks of maximum warming - one almost
immediately after its onset, during May-September 1997, and another in January-April 1998.
It was preceded by a cold episode in the Eastern Pacific, lasting from the end of 1995 to
the beginning of 1997. To some extent, this turnaround from a cold to a warm episode might
have magnified the negative impacts that this latest El Niño has had on certain fish
resources.

From the point of view of fisheries, the Eastern Pacific, and
particularly the area off western South America, is the area that is most negatively
affected by El Niño warming events, and this case was no exception. Rising coastal sea
temperatures and a weakening of the upwelling enrichment process caused a severe decline
in biomass and total production of small schooling pelagics and other coastal resources
that are otherwise readily available off the western coast of South America. This has
caused, and is still causing, large losses to the fisheries sectors in the area and a
worldwide shortage of fishmeal and fish oil.

Anchoveta fish stocks have declined to very low levels in Peru and
Chile. The main direct causes of this decline are: recruitment failure, with at least two
consecutive year classes either missing or being much less abundant; poor somatic growth,
with a significant loss in average weight; and a possible increase in fishing and natural
mortality. The region's anchoveta populations might take several years to recover. In the
same area, important sardine stocks were already declining before the onset of the El
Niño phenomenon and, although slightly warmer-than-normal conditions are known to favour
sardines in this area, prospects of a recovery are likely to have been offset or even
lowered owing to the extreme strength of this warming event.

Total production of horse mackerel has also been much lower in
1997/98 than in previous years. This is probably due to an offshore and poleward
displacement of existing concentrations, but an actual decline in the total biomass of
horse mackerel as a result of heavy fishing, together with the prevailing environmental
conditions, cannot be excluded.

So far, the 1997-1998 El Niño is known to have produced a 10 to 20
percent decline in total production from this area in 1997. This is a significant drop, as
the region usually produces nearly 20 percent of total world fish landings. An even larger
decline is foreseen for 1998. Catches of other small and medium-sized pelagics, coastal
demersals and other species (including salmon, tuna and some invertebrates) have also been
affected throughout the Eastern Pacific, from Canada to Chile. While heavy rain and
flooding, caused by El Niño in some areas, have resulted in reduced shrimp culture
activities and smaller landings of otherwise abundant and common fish species, catches of
other, more tropical, pelagic species (e.g. dolphin fish, tropical sharks and tuna) have
increased in the tropical and subtropical Eastern Pacific. This is because stocks
experienced a poleward displacement at the onset of El Niño. Both types of effect have
retreated or are expected to retreat more rapidly with the phasing out of the event.

In some areas, total production of some wild shrimp stocks and
shellfish has also increased as a result of the warmer temperatures. In other regions of
the world, minor or less dramatic negative effects of El Niño have been reported, for
example coral bleaching in the Indian Ocean and the tropical and Western Pacific. Even
though declines in the production of some tropical fish stocks might be compensated by an
increase in production in other areas, a possible reduction of 5 to 10 percent in total
marine fish capture could be attributed to the 1997-1998 El Niño.

Source: J. Csirke and A. Bakun, FAO Fisheries Department.

However, since most of the reduction will be absorbed by the fishmeal
industry, supplies for human consumption are expected to have increased by more than 3
million tonnes in 1997, which means that the average per caput supply (including
aquaculture) would have risen to a new maximum of about 16 kg. This peak would not have
been reached had it not been for the sharp rise in reported Chinese fish production. The
world's capture fishery production has probably contracted further in 1998 owing to the
ongoing effects of El Niño.

The expansion of fishing capacity, as measured by number of vessels and
fishers, slowed during the first part of the 1990s (see the section Fishers and fishing
fleets). The change was most noticeable in Asia, with the exception of China where fishing
capacity recorded a sharp increase in the same period. There are several plausible reasons
for a slowdown in the buildup of fishing capacity in Asia, the most significant being:
employment opportunities generated outside fisheries and agriculture by past economic
growth; the general realization that available wild stocks in Asia are being reduced
through overfishing; and governments' efforts to provide appropriate management frameworks
for capture fisheries (see the section National fisheries governance).

The present economic crisis might possibly lead to fisheries again
becoming a source of employment for those without work as well as the logical source of
livelihood for young members of fishing communities. If the economic crisis persists over
the coming years, managers and management structures will come under increasing pressure
to allow and facilitate an expansion of fishing capacity. It is also possible that, after
giving a small initial boost to production, such expansion will result in reduced capture
fishery landings for developing economies by 2010.

In the developed economies, fisheries governance should improve, making
it easier to maintain stocks at a level that permits the maximum sustainable yield (MSY)
to be harvested. Furthermore, better fisheries management (a direct result of improved
governance) will be supported by technological developments (Box 16, Telecommunications:
benefits for capture fisheries). In some developed economies, cheap fish imports are
likely to contribute to a reduction in fishing effort. These imports will originate in
developing economies whose currencies are losing value vis-à-vis those of OECD
countries. However, by 2010, better management should have resulted in economically
sounder fisheries and improved catch levels in most developed economies. This may lead to
strong pressure from national industries for the application of trade measures to control
fish imports. On the other hand, several countries are making a parallel effort to promote
freer trade in fish and fishery products (Box 17, Agreements regulating international fish
trade).

BOX 16 Telecommunications: benefits for capture fisheries

As is the case for many other industries, progress in
telecommunications technology has had, and will continue to have, a radical influence on
the fishing industry. When the potential impact of satellite technology on marine
communications was realized, the international community's initial response was to set up
the International Maritime Satellite Organization (INMARSAT). To begin with, the fishing
industry was slow to take advantage of the benefits offered but, in recent years, there
has been an exponential increase in the number of fishing vessels fitted with satellite
communications systems. According to one service provider, there were 2 000
installations in 1996 and 7 500 in 1998. Following are the main benefits accruing to the
fishing industry:

i) Increased safety from the Global Maritime Distress Safety
System (GMDSS). Unlike conventional radio communications systems, which are highly
dependent on atmospheric conditions, the GMDSS virtually guarantees a response to any
vessel distress message regardless of the circumstances. Even after a vessel has sunk, a
distress message can still be transmitted via an emergency position-indicating radio
beacon (EPIRB), which floats free from the vessel as it sinks.
ii) Better fisheries management through improved monitoring of the position of fishing
vessels using vessel monitoring systems (VMS). The periodic reporting of the position of a
fishing vessel assists in the MSC of all vessels at a central control point. Future
systems are likely to incorporate catch reporting in an electronic format that will allow
real-time fisheries management decisions to be made.
iii) Information systems linking fishing vessels and fish markets will allow more informed
decisions as to where and when to land fish. This will increase vessels' revenue and will
avoid any one fishing port having more landings than it can handle on any particular day.
iv) By using global positioning systems (GPS), which are an integral component in most
satellite communication systems, messages can be sent to specific users (e.g. information
that is of relevance to a given area is sent only to vessels located in that area). When
brought down to the level of individual vessels, when a patrol ship wishes to interrogate
a fishing vessel in a particular position, the satellite communications system on that
vessel will automatically respond with details of the ship and its fishing authorization.
This will avoid what are sometimes dangerous and time-consuming boardings by fisheries
inspectors at sea. Similar systems, known as automatic identification systems (AIS), are
already in operation in the merchant fleet as part of Traffic Separation Schemes. The use
of free-standing GPS is well established in larger vessels, but the introduction of
hand-held GPS now means that this important navigational aid will also be available to
much smaller vessels.

Source: A. Smith, FAO Fisheries Department.

BOX 17Agreements regulating international fish trade

Fish and fishery products are the most international of all
foodstuffs. Annually, between 35 and 40 percent of fisheries production is traded
internationally, reaching a value - as traded - of about US$50 000 million.
Developing countries currently account for half of this exchange and, in 1996, derived a
net surplus (value of exports minus value of imports) in the order of US$17 000
million.

International rules and regulations play a major role in governing
the fish trade, especially for developing economies. Two recent international agreements
of particular significance are the Agreement on the Application of Sanitary and
Phytosanitary Measures (SPS) and the Agreement on Technical Barriers to Trade (TBT). These
agreements were concluded under the Uruguay Round of multilateral trade negotiations
(MTNs) and are binding on all members of the WTO.

· The SPS Agreement specifies, inter alia,when
food safety concerns are a valid reason for exceptions to the principle of
non-discrimination in international trade. The agreement encourages WTO members to use
international standards and, in the area of food safety, refers to the Codex Alimentarius.
A country's requirement that internationally traded fish products be produced using the
HACCP system must only be enforced in a manner that respects the SPS agreement.
· The TBT Agreement sets out rules for technical regulations that are not directly
related to health. It is intended to ensure, inter alia, that requirements related
to quality, labelling, methods of analysis, etc., are applied to internationally traded
goods in a manner that does not mislead the consumer or discriminate in favour of domestic
producers or between goods of different origin. Thus, the TBT Agreement would apply to a
country intending to impose the use of ecolabels on internationally traded fish products.

Discussions have started concerning the possible coverage of future
MTNs, which may begin towards the end of 1999. Whether these discussions - which will also
concern the WTO Agreement on Agriculture - will include fish and fishery products is not
certain. However, to be prepared for such an eventuality, several countries have studied a
form of subsidy that is channelled to the fisheries sector. At present, the trade effects
of such subsidies can be addressed by WTO under its Agreement on Subsidies and
Countervailing Measures, as fish and fishery products are not included in the WTO
Agreement on Agriculture.

The generally reduced tariff rates for fishery products under the
Uruguay Round have resulted in a reduction of the relative tariff concessions granted by
the EC under the Lomé IV Convention to a large number of developing countries.
Discussions about if and how the effects of this erosion of benefits may be remedied have
begun between the EC and the countries concerned.

Source: E. Ruckes, FAO Fisheries Department.

Diverging trends in inland capture fisheries are evident for the
different regions. With regard to food fisheries, the rapid expansion in Asia is likely to
continue, while growth in other regions is expected to be slower. In the CIS and the
Baltic states, this is because of political and economic difficulties; in Latin America
because of a lack of demand; and in Africa because of financial, administrative and
logistical difficulties. Recreational fisheries are gaining importance mainly, but not
exclusively, in North America and Europe. In most regions, the practice of stock
enhancement will continue and probably become more widespread. In all regions, inland
fisheries yields are being negatively affected by environmental degradation, with Europe
and North America also having experienced significant negative impacts in the past.

In conclusion, by about 2010, there should be a slight increase in
capture fisheries production as fisheries in developed economies exploit recovered stocks
in a more sustainable manner and make increased use of small pelagics, both for human
consumption and reduction to fishmeal. The use of small pelagics should be facilitated by
advances in electronic technology and artificial intelligence systems that enable the size
and species of fish targets to be identified using echo-sounders and sonars. Such systems,
which establish more accurately the probabilities and confidence limits of species, will
allow skippers to assess their expected catch, by-catch and discards as well as to
estimate the profitability of fishing in a particular area before deploying their fishing
gear. Ultimately, this increased efficiency should also reduce wastage.

Thus, for 2010, it is not unreasonable to estimate a modest increase in
landings from inland and marine capture fisheries to between 95 million and 100 million
tonnes.

During the 1990s about 30 million tonnes of total finfish supplies have
been converted annually into fishmeal and fish oil. In 1997/98, reduced supplies were
mainly a consequence of difficulties in obtaining the raw material. The present downturn
in the world economy will reduce growth of the livestock sector (a main user of fishmeal),
and the production of fishmeal could well fall below the present level for some years.
Early in the period 2000-2010, European livestock producers will probably increase their
use of grains slightly, as real grain prices are expected to fall. Fishmeal and fish oil
production is likely to recover when stocks of small pelagics again become plentiful off
the west coast of South America and fishmeal prices regain competitiveness. In the medium
term, it is assumed that about 30 million tonnes of fish will continue to be converted
into fishmeal and fish oil.

TOTAL SUPPLIES

Total fish supplies will probably remain below or at the level of 125
million tonnes for the next three to four years and then increase towards the end of the
period 2000-2010. At that time, supplies may be in the order of 135 million tonnes, of
which 105 million tonnes would be available as food fish and the remaining 30 million
tonnes for the production of fishmeal and fish oil.

CONCLUSION

It is clear that both supply and demand in capture fisheries will
remain stagnant in the near future. On the supply side, a low availability of major
pelagic stocks is exerting a negative influence. Also in the near future, some
export-oriented aquaculture industries will reduce their production in response to weak
markets.

The medium-termprospects are somewhat better for both supply
and demand. Total demand for capture fisheries was estimated to be between 105 million and
110 million tonnes in 2010. As supplies are estimated to be 105 million tonnes, the
demand-induced upward pressure on prices will be weak, especially since the world
population is not expected to top 7 billion by 2010. A supply of 105 million tonnes of
fish in that year would in fact imply the stagnation of per caput supplies at about 15 kg
per year.

This scenario is dependent on several crucial assumptions, with the
main one hinging on developments in the world economy. The basic assumption is that the
present economic crisis will continue into the next century and will also affect the more
developed economies. Technology is another important factor: while it has been assumed
that capture fisheries - particularly in developed economies - will benefit from
developments in modern communications and electronic technologies, no similar assumption
has been made for aquaculture. This may be unduly pessimistic. For example, genetic
improvements in salmon, tilapia, catfish, carp and oysters have already been successful in
raising production, and work in this area is likely to continue to yield positive results.
Furthermore, on-farm management should improve, in both the areas of business and
technology. It is not inconceivable, therefore, that the developments in aquaculture
technologies will allow production to have increased further by 2010 even without the
stimulus of higher real prices.

1 Main contributor: U. Wijkström, FAO Fisheries Department.2 Including finfish, crustaceans and molluscs.3 Including intra-Asian trade.4 Tilapias and other cichlids as a group.5 J.F. Muir. 1995. Aquaculture development trends: perspectives for food
security. Paper presented at the Government of Japan/FAO International Conference on
Sustainable Contribution of Fisheries to Food Security, Kyoto, Japan, 4-9 December 1995;
and FAO. 1997. Review of the state of world aquaculture. FAO Fisheries Circular No.
886, Rev. 1. Rome.